Coterra(US:CTRA)2020-10-30 16:24Production and Revenue - Natural gas production decreased slightly by 0.1 Bcf, from 639.3 Bcf (2,342 Mmcf per day) in 2019 to 639.2 Bcf (2,333 Mmcf per day) in 2020, due to strategic curtailments in response to weaker prices[84]. - Average realized natural gas price was $1.60 per Mcf, a 38% decrease from $2.56 per Mcf in the same period of the previous year[85]. - Natural gas revenues decreased by $84.9 million, primarily due to lower natural gas prices, with a price variance of $(0.38) per Mcf, a 20% decrease compared to the same period in 2019[131]. - Natural gas revenues decreased by $529.9 million, primarily due to lower natural gas prices, with a price variance of $(0.83) per Mcf, representing a 35% decline[143]. - Total operating revenues for the nine months ended September 30, 2020, were $1,009.8 million, down 37% from $1,604.9 million in the same period of 2019[143]. Capital Expenditures and Financials - Total capital expenditures were $463.9 million, down from $622.1 million in the comparable period of the prior year[86]. - The 2020 capital program is expected to be approximately $575.0 million, a 27% reduction from the 2019 capital program of $783.3 million[103]. - Capital expenditures for the first nine months of 2020 totaled $463.9 million, down from $622.1 million in the same period of 2019[124]. - The company plans to allocate approximately $575.0 million for its 2020 capital program, focusing on drilling approximately 70 net wells in the Marcellus Shale[124]. Cash Flows and Debt - Cash flows provided by operating activities decreased by $712.4 million to $470.4 million in the first nine months of 2020 compared to $1.2 billion in the same period of 2019[114]. - Cash flows used in financing activities decreased by $292.3 million in the first nine months of 2020 compared to the same period in 2019, primarily due to $347.4 million lower repurchases of common stock[117]. - The company did not repurchase any shares during the first nine months of 2020, while it repurchased 15.5 million shares for $316.1 million in the same period of 2019[119]. - Total debt decreased from $1,220.0 million in 2019 to $1,161.7 million in 2020, resulting in a debt to total capitalization ratio of 35% in 2020, down from 36% in 2019[120]. - As of September 30, 2020, the carrying amount of long-term debt was $1,161,712, with an estimated fair value of $1,213,402[169]. Net Income and Loss - Net loss for the third quarter of 2020 was $15.0 million, or $0.04 per share, compared to net income of $90.4 million, or $0.22 per share, in the third quarter of 2019[128]. - Net income for the first nine months of 2020 was $69.3 million, or $0.17 per share, down from $534.1 million, or $1.27 per share, in the first nine months of 2019[140]. Expenses - Total operating and other expenses decreased by $4.6 million in the third quarter of 2020 compared to the same period in 2019, with direct operations increasing by $1.0 million[134]. - Operating and other expenses decreased by $4.0 million, with direct operations costs down by $0.7 million and exploration expenses down by $4.4 million[146]. - General and administrative expenses increased by $8.5 million, primarily due to higher stock-based compensation expenses[150]. - Income tax expense decreased by $32.7 million due to lower pre-tax income and a higher effective tax rate of 31.9% in the third quarter of 2020 compared to 22.2% in the same period of 2019[139]. - Income tax expense decreased by $138.7 million, reflecting lower pre-tax income and a decrease in the effective tax rate from 22.9% in 2019 to 22.3% in 2020[153]. Market Risk and Derivatives - The company is exposed to market risk primarily from natural gas prices, which are driven by spot market prices for North American natural gas production[157]. - The company uses financial commodity derivatives to mitigate risks associated with commodity price volatility, covering a portion of its production[158]. - The company has financial commodity derivatives covering 77.2 Bcf, or 12% of natural gas production, with floor prices ranging from $1.90 to $2.15 per Mmbtu and ceiling prices from $2.10 to $2.38 per Mmbtu[162]. - Natural gas collars covered 77.2 Bcf, or 12% of natural gas production, at a weighted average price of $2.09 per Mmbtu[162]. - Natural gas swaps covered 44.5 Bcf, or 7% of natural gas production, at a weighted-average price of $2.24 per Mmbtu[163]. - A significant portion of expected natural gas production for 2020 and beyond remains unhedged, exposing the company to price volatility[162].